Delivering his keynote address at the Enforcement Day celebration of the Revenue Department in the Finance Ministry here on Thursday, the President of the Paris-based Financial Action Task Force (FATF), Vladimir Nechaev suggested that India and other member countries should assess risk management and on this basis should evolve a risk-based approach to prevent money laundering.

'First the relevant financial institutions in countries should assess risk management and thereafter a risk-based approach should be evolved to prevent money laundering,' he said.
According to Nechaev Australia has taken up the risk-based approach. Kazakhstan and Serbia have initiated the process.

The 36-member inter-governmental body, FATF was set up in 1989 on the initiative of the G7 with the purpose of combating money laundering and terrorist financing.

The Directorate of Enforcement under the Revenue Department in the Indian Finance Ministry is responsible for enforcing the provisions of two special laws - Foreign Exchange Management Act (FEMA), 1999 and Prevention of Money Laundering Act (PMLA), 2002. The origin of the Directorate can be traced back to May 1, 1956 when an Enforcement Unit'was formed in the Department of Economic Affairs in the Finance Ministry for enforcing exchange control laws under the then Foreign Exchange Regulation Act (FERA), 1947.

The President of India Pranab Mukherjee inaugurated the Enforcement Day celebration. The President said that the process of globalisation and rapid advances in information and communications technology has shrunk the world. Money can nowadays move very quickly across national borders. To stay ahead of the curve, the Enforcement Directorate should develop expertise in financial investigations and detection of cross border flows. The Directorate should also look at adopting state of the art technology in relevant areas such as communications, technical infrastructure and computer forensics. The Enforcement Directorate has been carrying out sensitive work, which requires a high degree of responsibility and confidentiality. The Enforcement Directorate should get adequate resources in terms of money and manpower, technology and legal expertise, so that it can effectively fight against money laundering.

President Mukherjee, who was earlier country's finance minister, had then paved the way for India's membership of FATF in 2010.

The Director of Enforcement Dr Ranjan Katoch alleged serious shortage of manpower in the Directorate to meet the challenge. He said only about one-tird of 2064 positions have been filled so far.

In 2013-14 the Directorate completed investigations in 1678 FEMA cases and notices under FEMA were issued in 573 cases for an amount of Rs 20,286 crore. It has finalised FEMA adjudication proceedings in 780 cases.The backlog of FEMA adjudication cases has also been brought down drastucally, he said.

Since PMLA came into force in 2005, the Directorate has traced and attached laundered assets worth Rs 5,346 crore in 326 attachment orders, arrested 32 money launderers and has prosecuted money launderers in 104 cases.

In 2013-14 127 attachments were effected under PLMA as against 65 in the previous year. The total value of assets attached in 2013-14 was Rs 1,759 crore.

India has also developed linkages with Asia Pacific Group on Money Laundering (APG) and the Eurasian Group (EAG). India was co-chair of APG in 2010-12. The India has also developed bilateral cooperation in intelligence and investigations with several countries. The Directorate has been successful in overseas attachment of immovable property in Australia and bank account in Switzerland.